A federal court has approved a settlement agreement between the Department of Justice and Anheuser-Busch InBev that will allow the mammoth beer company to complete its purchase of Grupo Modelo, a Mexico-based brewer that produces Corona, Pacifico and other beers.
The deal, which requires AB InBev to sell all of Modelo's U.S. business, clears the way for the $20.1 billion acquisition of the remaining portion of Modelo that AB InBev did not yet own. Terms of the deal were announced Friday.
Previously, the Justice Department's antitrust division had rejected a proposal from AB InBev that it sell Crown, an importer/distributer of Modelo's beers in the U.S., to Constellation Brands, which jointly owns the venture with Modelo. Those terms would have given Constellation the U.S. license to sell the beers — which it would have to continue buying from AB InBev.
The newly approved deal hinges on the inclusion of a Modelo brewery in Piedras Negras, Mexico, southwest of San Antonio, Texas, which the agency calls the company's "newest, most technologically advanced brewery," as well as exclusive and perpetual licenses to sell and distribute Modelo beers in the U.S.
Constellation will pay AB InBev $2.9 billion for control of the beer brands in the U.S., along with $1.85 billion for full control of Crown.
The goal of the settlement, according to a Justice Department release, is to ensure Constellation will be able to compete in the U.S. market.